Improving the Methodology for Assessing the Creditworthiness of the Potential Borrower in a Bank

In modern conditions, special attention is paid to the problem of improving the methodology for assessing the creditworthiness of a potential borrower in a bank. At the same time, the assessment of the borrower's creditworthiness is among the most difficult issues in the implementation of the principle of repayment of loans, since each bank must develop its own methodology for assessing the creditworthiness of a potential borrower, taking into account the specific conditions of its operation. Assessment of the borrower's creditworthiness is one of the ways to prevent or minimize the credit risk of the bank, it is necessary to supplement this methodology with new indicators. As these additional indicators can be: turnover ratio of total assets; the proportion of accounts receivable in current assets; the proportion of doubtful debts reserve in receivables; the proportion of overdue payables in total debt. In terms of the banking system, an effective risk-management system for credit operations is based on the "risk-profitability" ratio. At the same time, the crisis conditions for the development of the banking business determine a shift in this dependence towards minimizing risks, which leads banks to search for high-quality and efficient methods for identifying, evaluating and minimizing credit risks. Therefore, the improvement of the risk-management system of the bank's lending operations will contribute to the formation of a high-quality structure of the loan portfolio, ensuring a sufficient level of profitability at the level of riskiness in accordance with the limits and standards established in the bank.